Allegheny College, a small private college in western Pennsylvania, had its credit rating lowered to the brink of junk as it grapples with lower student enrollment — a growing trend for small colleges around the country, Bloomberg News reported. Moody’s Investors Service downgraded the college’s issuer rating one notch to Baa3, citing “weak financial operations” and a declining pool of applicants. The college’s revenue fell to about $80 million for the 2023 fiscal year — a roughly 7% drop from four years ago — according to its annual reports. The school has more than $50 million of outstanding debt and is wrestling with operating deficits. “Deeply unbalanced financial operations and strained student demand provide for escalating credit challenges,” Christopher Collins, lead analyst at Moody’s, said in the report. “With weak demographics and elevated student market competition, both pricing power and revenue growth will remain suppressed.” One of the oldest private liberal arts colleges in the country, Allegheny has seen a dramatic decline in enrollment in the past decade. From 2012 through 2022, it’s student population fell 37% to 1,353 pupils, according to the National Center for Education Statistics.
